New US regulatory guidance allowing banks to become validators for blockchain networks is a major step for institutional adoption but worsens centralization risks, Bohdan Opryshko, chief operating officer of staking service provider Everstake, told Cointelegraph.
On March 7, the US Office of the Comptroller of the Currency (OCC) eased its stance on how banks can engage with crypto, including permitting banks to participate “in independent node verification networks,” the regulator said.
Opryshko said US banks’ increased involvement in proof-of-stake (PoS) networks, such as Ethereum and Solana, could be a “double-edged sword.”
“If banks become dominant validators, power could become concentrated, reducing the decentralized nature of PoS networks,” Opryshko told Cointelegraph on March 12.
The additional financial inflows into PoS networks could also suppress staking yields, potentially undermining smaller validators, he added.
“If major institutional players, such as banks, enter the staking market and suddenly stake large amounts, […] it could cause a sharp reduction in staking rewards for all other participants,” Opryshko said.
Staking yields as of March 12. Source: Staking Rewards
Related: OCC lays out crypto banking after Trump vows to end Operation Chokepoint 2.0
As of March 12, Ether stakers earn approximately 5.5% APR, and Solana stakers earn close to 8%, according to data from Staking Rewards.
Staking involves securing blockchains by posting crypto as collateral with validators in exchange for rewards.
The OCC’s announcement came after US President Donald Trump vowed to end a prolonged regulatory crackdown that restricted crypto firms’ access to banking services.
Crypto industry outrage over so-called “debanking” reached a crescendo when a June 2024 lawsuit spearheaded by Coinbase resulted in the release of letters showing US banking regulators asked certain financial institutions to “pause” crypto banking activities.
In a Jan. 23 executive order, Trump — who has vowed to make America the “world’s crypto capital” — told agencies to prioritize “fair and open access to banking services” for digital asset firms.
As of March 12, Anchorage Digital is the only federally chartered US bank to offer cryptocurrency staking.
Magazine: SEC’s U-turn on crypto leaves key questions unanswered
—
Blog powered by G6
Disclaimer! A guest author has made this post. G6 has not checked the post. its content and attachments and under no circumstances will G6 be held responsible or liable in any way for any claims, damages, losses, expenses, costs or liabilities whatsoever (including, without limitation, any direct or indirect damages for loss of profits, business interruption or loss of information) resulting or arising directly or indirectly from your use of or inability to use this website or any websites linked to it, or from your reliance on the information and material on this website, even if the G6 has been advised of the possibility of such damages in advance.
For any inquiries, please contact [email protected]
